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  • © 2017

The Mathematics of Options

Quantifying Derivative Price, Payoff, Probability, and Risk

Palgrave Macmillan
  • Fills the empty middle ground between introductory guides and technical manuals

  • Presents practical and actionable mathematical tools, including Excel formulas

  • Uses advancements in technology to make technical trading approachable for more traders

  • Includes supplementary material: sn.pub/extras

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eBook USD 39.99
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  • Read on any device
  • Instant download
  • Own it forever
Softcover Book USD 54.99
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  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book USD 69.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
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Table of contents (11 chapters)

  1. Front Matter

    Pages i-xxii
  2. Trading Goals and Objectives

    • Michael C. Thomsett
    Pages 1-29
  3. The Role of Fundamental and Technical Analysis

    • Michael C. Thomsett
    Pages 31-53
  4. Pricing of the Option

    • Michael C. Thomsett
    Pages 55-78
  5. The Dividend Effect

    • Michael C. Thomsett
    Pages 79-97
  6. Return Calculations

    • Michael C. Thomsett
    Pages 99-123
  7. Strategic Payoff: The Single-Option Trade

    • Michael C. Thomsett
    Pages 125-160
  8. Strategic Payoff: Spreads

    • Michael C. Thomsett
    Pages 161-196
  9. Strategic Payoff: Straddles

    • Michael C. Thomsett
    Pages 197-230
  10. Probability and Risk

    • Michael C. Thomsett
    Pages 231-254
  11. Option Pricing Models

    • Michael C. Thomsett
    Pages 255-267
  12. Alternatives to Pricing Models

    • Michael C. Thomsett
    Pages 269-284
  13. Back Matter

    Pages 285-331

About this book

This book is written for the experienced portfolio manager and professional options traders. It is a practical guide offering how to apply options math in a trading world that demands mathematical measurement. 


Every options trader deals with an array of calculations: beginners learn to identify risks and opportunities using a short list of strategies, while researchers and academics turn to advanced technical manuals. However, almost no books exist for the experienced portfolio managers and professional options traders who fall between these extremes.


Michael C. Thomsett addresses this glaring gap with The Mathematics of Options, a practical guide with actionable tools for the practical application of options math in a world that demands quantification. It serves as a valuable reference for advanced methods of evaluating issues of pricing, payoff, probability, and risk. In his characteristic approachable style, Thomsett simplifies complex hot button issues—such as strategic payoffs, return calculations, and hedging options—that may be mentioned in introductory texts but are often underserved. The result is a comprehensive book that helps traders understand the mathematic concepts of options trading so that they can improve their skills and outcomes.

Authors and Affiliations

  • Spring Hill, USA

    Michael C. Thomsett

About the author

Michael C. Thomsett has been writing for a living since 1978 and has published more than 90 books. These include 12 options books. His best-selling Getting Started in Options has been published in nine editions and sold more than 300,000 copies. He also has developed and presented options webinars, and coaches on a live trading room every day and is a frequent speaker at trade shows and investment conventions. The author blogs on TheStreet.com, Seeking Alpha, Options Money Maker, Stockcharts.com, and social media.

Bibliographic Information

  • Book Title: The Mathematics of Options

  • Book Subtitle: Quantifying Derivative Price, Payoff, Probability, and Risk

  • Authors: Michael C. Thomsett

  • DOI: https://doi.org/10.1007/978-3-319-56635-1

  • Publisher: Palgrave Macmillan Cham

  • eBook Packages: Economics and Finance, Economics and Finance (R0)

  • Copyright Information: The Editor(s) (if applicable) and the Author(s) 2017

  • Hardcover ISBN: 978-3-319-56634-4Published: 24 October 2017

  • Softcover ISBN: 978-3-319-85960-6Published: 30 August 2018

  • eBook ISBN: 978-3-319-56635-1Published: 30 August 2017

  • Edition Number: 1

  • Number of Pages: XXII, 331

  • Number of Illustrations: 59 b/w illustrations

  • Topics: Risk Management, Financial Engineering

Buy it now

Buying options

eBook USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book USD 69.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Other ways to access